Valeant Pharmaceuticals hired a lawyer and a public relations firm expert in crisis management, with political connections in Washington, D.C. as the company faces investigations regarding its drug pricing, according to Reuters based on information from people familiar with the matter.
According to Reuters, the Canadian pharmaceutical company does not maintain a huge presence on the Capitol Hill. Its decision to hire a Washington-based attorney and crisis management experts signal a change in its strategy.
Bill Ackman, one of the largest shareholders of Valeant, previously stated that the management of the company made a “meaningful mistake” for underinvesting in public relations.
Valeant hired Robert Kelner, a partner at the law firm, Covington & Burling to help respond to congressional investigations.
The Canadian pharmaceutical company also engaged the services of Vianovo, a boutique public relations firm expert in crisis management. The firm is run by former political campaign and government aides that specialize in “high-stakes brand, policy and crisis issues.” Some of the clients of Vianovo are International Business Machines Corp. and Wal-Mart Stores.
In a statement, Laurie Little, the senior vice president of investor relations at Valeant said, the company “uses a variety of firms for legal and public relations work. Covington recently was retained to assist the company in responding to congressional inquiries.”
Drug price hikes: the focus of U.S. investigations
Over the past few months, the U.S. Congress and prosecutors have been focused on investigating the abrupt and dramatic drug price hikes. Valeant is among the pharmaceutical companies under investigation on the issue. The Canadian pharmaceutical company increased the price of its heart-rhythm treatment, Isuprel and blood-pressure drug, Nitropress by 525% and 212%, respectively.
In mid-October, Valeant received a subpoena from prosecutors seeking information regarding its drug pricing program. The Senate Special Committee on Aging also requested information from Valeant. The Committee is conducting a series of hearings to investigate the sudden and significant price increases in prescription drugs that are no longer protected by patents.
Valeant recently hired a former Deputy Attorney General
Additionally, Valeant is also facing allegations in connection with its business relationship with Philidor RX Services. Citron Research recently called the Canadian pharmaceutical company as an Enron-like fraud, although the firm has disputed these allegations.
Valeant recently hired Mark Flip of Kirkland & Ellis LLP to advise its ad-hoc committee, which is responsible for reviewing the allegations related to its business relationship Philidor and other issues. Mr. Flip was a former Deputy Attorney General of the United States.
